MGM Growth Properties, the real estate investment trust spun off from MGM Resorts International, posted strong results in the first quarter, a period that also saw the REIT conclude a $1 billion deal to buy the Hard Rock Rocksino in Ohio.
MGM Growth, which trades on the New York Stock Exchange under the symbol MGP, beat Wall Street forecasts with $215.8 million in revenue for the 12 weeks ended March 31. Funds from operations, a closely watched REIT metric, was $140.6 million. Net income was $15.8 million, or 22 cents per share.
The Hard Rock property, located in Northfield Park just south of Cleveland, contains more than 2,300 video lottery terminals, a 1,900-seat concert venue, a 250-seat showroom and several restaurants. The 4-year-old property reported $232.5 million in gaming revenue last year.
“This attractive addition to our portfolio demonstrates again our commitment to generating value for our shareholders,” MGM Growth Properties CEO James Stewart.
MGP is paying $1.06 billion in cash and debt with a view to spinning off the operation to a third-party while keeping the real estate. The seller is an investment entity called Northfield Park Associates. The deal is expected to close in the second half.
In January, MGP, which owns 12 MGM Resorts properties in five states, including six Las Vegas Strip casinos, bid about $5.85 billion bid for Caesars Entertainment’s VICI Properties REIT. If it had gone through it would have created a REIT with 32 hotel casinos, but reportedly the two sides failed to agree on price.
